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Overhauling the Tax System

Letter to the Editor, City North Messenger, Adelaide, 22 January 2014

Professor Richard Blandy’s proposal to remove stamp duty and replace it with a land-value tax, similar to or on top of council rates, seems doomed (City North Messenger, January 15), but we still need to overhaul our state tax system.

While we certainly should hold governments, including local governments, accountable for the way they spend the revenue they have, in the past five years revenue from state taxes has actually fallen dramatically, leaving a $1.1 billion hole in state government coffers.

As a major form of state revenue, stamp duty has a number of drawbacks: it is volatile and hard to budget, and it is an unfair impediment to people moving to take jobs, or to downsize homes in retirement.

However, with land taxes levied only on investment properties, low-income renters end up paying a tax which those who are generally better off don’t pay.

There are lots of other examples of inefficient or unfair taxes.

Adjusted for inflation, last year South Australians paid about $90 a year less per person in state taxes than five years ago which leads to cuts in the services we all want and need.

We need to overhaul the state tax system, because it is simply not providing enough revenue to fund the services that our community needs, like schools, hospitals, roads, police and support for vulnerable members of our community.

That is why, in this election, SACOSS has been calling on all parties to commit to restoring government revenue to pre-GFC levels in the next term of Parliament.

Without a fair and sustainable tax base, vital services will simply disappear.

ROSS WOMERSLEY, Executive Director, South Australian Council of Social Service

Published Date: 
Friday, 17 January 2014